Does Settle3D automatically assign any drainage conditions to layers?

No. Settle3D does not assume any drainage conditions for sand layers (layers with consolidation turned off), or any other layers, that are not specified in the drainage conditions dialog.

If you do assign drainage to the top / bottom of a sand layer, though, this drainage condition will propagate through the non-consolidating layer. Basically, if you want the sand layers to act as a drain, you need to explicitly define this drainage condition.